NEWS
Following an ASIC investigation, the Markets Disciplinary Panel (MDP) has fined J.P. Morgan Securities Australia Limited (JPMSAL) $775,000 for permitting suspicious client orders to be placed on the futures market, ASX 24.
The MDP found that 36 orders placed by a client between 11th January 2022 and 3rd March 2022 were submitted with the intention of creating a false or misleading appearance with respect to the market for, or the price of, the Eastern Australia Wheat futures January 2023 (WMF3) contracts.
ASIC Deputy Chair Sarah Court said, ’There are real world consequences for this sort of behavior which is why tackling manipulation in energy and commodities derivatives markets has been an ASIC priority.
‘Farmers use these contracts to manage wheat price fluctuations which can affect what Australians pay at the checkout.
‘Market participants are the gatekeepers to Australia’s markets, and they need to uphold the highest standards. They have a central role in detecting, preventing and disrupting suspicious trading activity, particularly in periods of volatility as was the case here.
‘The MDP’s decision emphasizes that market participants cannot solely rely on automated trade monitoring systems to detect potential misconduct and must take immediate action once alerted to misconduct by ASIC,’ Ms Court said.
The MDP’s Infringement Notice outlines that, ‘this case highlighted the responsibility of all market users to proactively draw attention to potential rule breaches in order to maintain market integrity, and the importance of timely communication between regulators, market participants and clients to ensure that any potential misconduct is rectified immediately once detected’.
The MDP found that JPMSAL’s failure to identify its client’s trading as suspicious was ‘careless’, that JPMSAL should have detected the conduct, and should have acted more expeditiously when alerted to it by ASIC.
